Troubled manufacturer secures bank extensions in UK and Thailand.
Abbeycrest has announced that it has revised and extended its banking facilities in the UK and Thailand, following the breach of its banking covenants with senior backer Burdale Financial in January.
Burdale Financial has now agreed to extend the renewal date of Abbeycrest’s UK bank facility to March 9, 2014 and reset the associated covenants.
In the past month Abbeycrest has shut down its Global Edge branded jewellery operation in Leeds and consolodated that part of the business into the main Abbeycrest company. Chairman Simon Ashton has described it as Global Edge as a vehicle for Abbeycrest to test the branded jewellery market and added that the plans has always been for the Global Edge division to be consolodated within Abbeycrest.
With Global Edge now merged into the main business, Ashton said that the company’s main branded focus will be on the regeneration of British wedding band brand Brown & Newirth. He said that the extension of support from its financial backers will be used “to focus on top-line growth as we continue to develop our design-led, branded jewellery ranges and grow the business”.
Ashton added:“This continued support from bankers is just part of our plan to rejuvenate the group and invest in Brown & Newirth.”
Abbeycrest is currently going through a financial reshuffle at Abbeycrest as the jewellery manufacturer works to transfer more of its working capital to its operations in Thailand. This move has been reflected in the latest financial agreements with Burdale halving Abbeycrest’s UK facility limit from £8 million to £4 million.
Simultaneously, the company’s Thai subsidiary Abbeycrest Thailand has increased its seasonal working capital facilities with Siam Commercial Bank by £3 million, which comprises an increase of £2.6 million in its invoice finance facility and an additional short-term loan of £400,000 to help the consolidation of its Hong Kong activities into Abbeycrest Thailand and takes the total extended Siam Commercial Bank facilities to £8.8 million.
Despite the shift towards Thailand, Ashton has assured Professional Jeweller that the main manufacturing operations of Brown & Newirth will remain in the UK for the time being.
Despite the widely publicised rebranding, rumours have been rife in the industry that Brown & Newirth is in a precarious financial position, there has been reports of service standards slipping at Brown & Newirth and after the departure of veteran director Gary Williams and the death of managing director Chris Sanders in the past year confidence in the brand has been rocked. However, Ashcroft is keen to put a positive spin on the situation.
He said: “Chris and Gary developed an extremely competent business and team at Brown & Newirth. We are keen to combine this great legacy with fresh ideas from outside to create a more dynamic business; one that holds on to the qualities of the past but more able to respond to the rapidly changing consumer and retail trends of the future.
“We are very aware and concerned about this [slipping standards]. Brown & Newirth’s reputation for the highest standards of handmade quality and personal service is extremely important to us. Consequently, we have invested in new systems and training over recent months and have also just launched our new Customer Charter. And while this represents the standard of service our customers should expect now, we are also committed to improving on this even further."
Outside of the exit iof Williams and the death of Saunders, Brown & Newirth has had a wider personnel shuffle. Amber Saunders has taken over head of sales, Jerry Witcomb is now heading up production, Julie Large has joined the company as creative and marketing director and Sewa Kang has been appointed finance and operations director. Ashton commented: "Together they bring an excellent combination of jewellery experience and world-class standards to take Brown & Newirth forward.”
Shares in Abbeycrest rose on news of the extension of banking facilities. The share price rose by 8.7% today to 0.25p. Over the past year Abbeycrest’s share price has crashed 58.93%.